Tele Atlas's Operating Result Boosted by European Activities
'S-HERTOGENBOSCH, Netherlands--March 13, 2003--Tele Atlas---- Strong fourth quarter -- Positive operating result in Europe -- American database ready for market -- Significant new navigation contracts -- Strong position in Location Based Services
Tele Atlas, one of the world's leading developers of detailed geographical databases, realized revenues of EUR 78.3 million for 2002, an increase of 10% on 2001. EBITDA increased from EUR 4.6 million to EUR 17.0 million.
The operating result (EBIT) for the group was EUR 19.0 million negative, an improvement of EUR 5.2 million in comparison with 2001. The improvement was due principally to the successful growth of the European activities while investments in North American operations are ongoing. In Europe the EUR 6.5 million loss reported in 2001 was turned into a EUR 4.5 million operating profit in 2002, the outcome of higher revenues in combination with a lower cost base. Growth in Europe was particularly strong in the fourth quarter, with fourth-quarter revenues rising by 40% from EUR 13.3 million in 2001 to EUR 18.7 million in 2002. In the same period, European EBITDA increased by 132% to EUR 10 million compared to 2001.
The net result for the entire group amounted to EUR 18.6 million negative, a modest improvement on the EUR 18.9 million loss for 2001. This is fully attributable to North American operations which are still in the investment phase.
Performance
Growth is currently being driven by the in-car navigation segment. In-car navigation systems are being fitted as standard features in more vehicles and not just the top models. Sales of new systems for retro fitting are also increasing. The growing number of systems is generating not only higher sales of bundled software but also stronger demand for updates and specialty CD-ROMs. Growth is being realized despite the difficult economic conditions and the less developed distribution channels in the aftermarket.
The European activities are developing largely in line with the scenario projected in recent years. Long-term investments in the construction of the database, which is the most complete and robust geographical database currently on the market, have produced a healthy return that is set to increase further. Revenue in Europe rose by 14 % to EUR 67 million. In-car navigation made the largest contribution, 70%, to the increase although revenues for 2002 were adversely influenced by Mercedes replacing the navigation platform developed by one of our largest customers with one that was not supported by Tele Atlas at the time.
Group Revenues in other markets rose by 21% to EUR 22,3 million, thanks chiefly to growth in Location Based Services. The growth of PDAs with built-in navigation programs for use in and out of cars also made a positive contribution to the result.
In North America, revenues were 5% lower at EUR 11,2 million owing to the decline in activities for third parties and lower income from patents. Developments in the North American market are expected to follow those in Europe, albeit at a faster pace. The North American database, the most powerful ever built, was presented in October 2002 and officially introduced in January 2003. The product is currently being thoroughly tested by existing and potential customers for use in their applications. The first revenues from these products are expected towards the end of the year.
Strong foundations for future profitability were laid in 2002 thanks to a substantial new contract with Harman International Industries (Becker) and a renewed and extended contract with Siemens VDO. All these contracts are for in-car navigation applications. In Location Based Services, too, Tele Atlas had a successful year: contracts with Mapinfo (for Vodafone), Hutchison 3G, ViaMichelin and Wanadoo have put Tele Atlas in a prominent position for the forthcoming launch of applications for third generation telephones.
Prospects
The weak economic climate has not yet had a significant influence on the in-car navigation market. Navigation systems are coming within the reach of more consumers and the number of applications is rising. With contracts for all significant platforms, Tele Atlas expects its market share to increase further, in the first instance in Europe. In North America, too, Tele Atlas foresees growth in its market share as increased use is made of the new database. Owing to the time required to test the database and build it into systems and applications, however, the growth will not feed through until the end of 2003. In the Location Based Services market, the rollout of 3G telephones is taking longer than expected but Tele Atlas's good relationships with the main providers put it in a strong position.
For 2003, Tele Atlas expects a further increase in revenues and results, although the economic situation makes the rate of growth uncertain.
Key figures (in millions of euros except for 2002 2001 2000(a) 1999 per share information and average (pro number of employees) forma) ---------------------------------------------------------------------- Sales revenues 78.3 70.9 60.2 38.7 ---------------------------------------------------------------------- Operating result before depreceation and amortization (EBITA) 17.0 4.6 12.5 10.0 ---------------------------------------------------------------------- Operating Result (EBIT) (19.0)(24.2) (8.5) (5.3) ---------------------------------------------------------------------- Net Result (18.6)(18.9) (6.1) (5.5) ---------------------------------------------------------------------- Average number of employees 1,819 1,700 1,215 869 ---------------------------------------------------------------------- Earnings per share (0.49)(0.50)(0.19) (0.22) ---------------------------------------------------------------------- (a) Results of Etak were included as of acquisition date (May 2000)
Appendix: Balance Sheet, Statement of Operations, Cash Flow statement
Tele Atlas is a leading player in the development and construction of detailed geographical databases that enable a wide range of applications. The Tele Atlas database covers 388 million people in Europe and 283 million people in the United States. Tele Atlas is active chiefly in the markets for in-car navigation, GIS applications, Location Based Services and Telematics. Through the combination of coverage, content and detail, its products are the quality benchmark in this extremely specialized market.
Consolidated statement of operations
Year ended December 31,
(in thousands of euros, except for per share information)
-----------------------------
Notes 2002 2001
---------- ----------
Revenues
- sales 78,291 70,870
Production for own fixed assets
capitalized
- internally generated databases
and tools 11 66,564 66,998
Operating expenses
- cost of purchased material and
services 8,398 6,663
- personnel expenses 3 78,913 79,496
- depreciation and amortization 35,970 28,787
- other operating expenses 40,571 44,342
- restructuring costs - 2,742
---------- ----------
Total operating expenses 163,852 162,030
---------- ----------
Operating result (18,997) (24,162)
Financial income, net 4 1,321 6,359
Income from investments and
participations - (88)
---------- ----------
Result before income taxes (17,676) (17,891)
Income tax 5 (968) (1,015)
---------- ----------
Net result (loss) (18,644) (18,906)
---------- ----------
Net result (loss) per ordinary share
(basic) 6 (0.49) (0.50)
Net result (loss) per ordinary share
(diluted) 6 (0.48) (0.49)
Consolidated balance sheet
ASSETS As at December 31,
(in thousands of euros)
Notes 2002 2001
-------------------------
Current assets
- cash and cash equivalents 7 40,120 111,133
- trade accounts receivable 8 14,199 12,160
- inventories 262 981
- prepaid expenses and other
current
assets 9 5,406 5,042
- financial instruments 16 - 464
-------------------------
Total current assets 59,987 129,780
Non-current assets
Tangible fixed assets 10
- property, plant and
equipment 10,630 12,534
Intangible fixed assets 11
- databases and tools 208,405 175,323
- goodwill 24,401 32,924
-------------------------
Total intangible fixed assets 232,806 208,247
-------------------------
Total non-current assets 243,436 220,781
-------------------------
Total assets 303,423 350,561
-------------------------
Consolidated balance sheet
EQUITY AND LIABILITIES As at December 31,
(in thousands of euros)
Notes 2002 2001
-----------------------
Current liabilities
- short term debt and current portion of
long term debt 696 9,904
- trade accounts payable 5,550 7,307
- income tax payable 1,067 1,042
- accrued expenses and other liabilities 12 18,114 22,436
- deferred revenues 1,852 1,690
- Financial Instruments 1,258 -
-----------------------
Total current liabilities 28,537 42,379
Non-current liabilities
- shareholder entitlement to potential
tax benefits 13 20,286 20,286
- deferred taxes 21,688 21,152
- pension liabilities 14 2,241 1,944
- other non-current liabilities 336 50
-----------------------
Total non-current liabilities 44,551 43,432
Shareholders Equity 15
- share capital 3,801 3,801
- additional paid in capital 287,251 287,251
- accumulated result (deficit) (41,586) (7,092)
- treasury stock (487) (304)
- result (loss) current year (18,644) (18,906)
-----------------------
Total equity 230,335 264,750
-----------------------
Total equity and liabilities 303,423 350,561
-----------------------
Consolidated statement of cash flows
Year ended December 31,
(in thousands of euros)
Notes 2002 2001
--------------------
Cash flow from operating activities
Operating results (18,997) (24,162)
Depreciation and amortization 35,970 28,787
--------------------
Operating result before depreciation and
amortization (EBITDA) 16,973 4,625
Changes in other non-current liabilities 247 1,212
Changes in working capital and other changes 17 (9,082) 6,401
--------------------
Cash generated from operations 8,138 12,238
Interest received 1,566 5,587
Income tax paid (407) (132)
--------------------
Net cash inflow from operating activities 9,297 17,693
Capitalization of databases and tools (66,564) (66,998)
--------------------
Net cash outflow from operating activities
after capitalization databases and tools (57,267) (49,305)
Cash flow from investing activities
Cash acquired through newly consolidated
Company - 959
Investments in subsidiaries (9,537) (9,642)
Purchase of property and equipment (4,026) (8,297)
--------------------
Net cash outflow from investing activities (13,563) (16,980)
Cash flow from financing activities
Treasury shares acquired (183) (304)
Proceeds from share issues - 13
--------------------
Net cash inflow/(outflow) from financing
activities (183) (291)
--------------------
Net increase/(decrease) in cash and cash
equivalents (71,013) (66,576)
Cash and cash equivalents at the beginning
of the period 111,133 177,709
--------------------
Cash and cash equivalents at the end of the
period 40,120 111,133
--------------------
